Category: Selling

Sage North America spent an unusual amount of energy and time trying to persuade both customers and channel partners that their July 17, 2012 Sage UK investor day announcement outlining core and non-core categories of products did not necessarily indicate a much slower path for some North America products which had been designated as non core.
Some prospects, worried about the negative press and competitor coverage these Sage proclaimed non-core products have gotten were able to obtain a comfort letter from Sage about how much the products are loved, have strong demand and continue to be invested in.

While the letter stops short of promising that the products in question (namely Sage SalesLogix, Act! and MIP) would not be disposed/sold/sunset – it did call into question “competitors who are spreading a great deal of uncertainty and doubt” while adding “we continue to invest heavily in our Sage SalesLogix and Sage ACT! businesses”.

Tom Miller came to Sage in 2009 shortly after the arrival of Jodi Uecker-Rust who had recently joined as president of Sage Business Solution. Uecker-Rust subsequently departed in June 2010 leaving Miller to hold the fort in a challenging ERP partner environment.

During his tenure at Sage Tom Miller oversaw some less than popular – though necessary -changes in partner program terms such as increased educational requirements and a reduction in partner support cases.

Though Sage North America has undergone much change in leadership – Tom Miller was always the steady force for channel partners to discuss issues or request help with Sage concerns. He notably recruited several key Sage executives from Microsoft and worked tirelessly to listen to the concerns of all partners at Sage no matter how big or small.

It does not look as if Sage have announced plans to replace Tom with most existing channel executives being slightly reshuffled to take on new tasks required by Tom’s retirement.

Given that the email announcing Tom’s departure was one of the more glowing executive change announcements from Sage that I can remember I’m thinking this is mostly as stated – a well deserved retirement.

Is the training room of the future moving from on-site to online? The Sage Authorized Training Roster is now down to 6 centers which is 19 less than what appear on this 2006 Sage ATC roster. Most ATC sites that I spoke with claimed the business was never really about training but about capturing customers who were separated (aka orphaned) from a Sage partner and converting them to customers of the ATC.

With webinars much more prevalent today than in 2006 – it appears that the days of traveling to a training center may soon go the way of the pay phone booth. Sage partner Blytheco has created a series of online training videos – as have other Sage partners – which may predict that the next wave of ERP training is quickly moving to online and on-demand.

A consultant emailed me their opinion of what they believe Sage North America’s biggest channel challenge is with respect to cross selling add-ons to existing customers.

I think this closely summarizes the thoughts of other partners who have been questioning the recent moves by the company to sell more servies (support) and products directly to customers.

Product sales have historically been offered only through Sage’s partner channel – though increasingly I’m told by multiple sources that Sage is ramping up what some may consider to be an aggressive push to market and sell more directly into some customers of smaller partners with fewer than 49 customers.

Certainly Sage is not alone in their channel challenges though it’s rare that we’ve seen a channel company bypass partners and remain a vibrant partner centric company (the old Macola and Epicor come to mind as two examples of ERP companies who bypassed their channels and never seemed to regain their full channel strength).

Warning on GotoAssist: I continue to have customers – most likely on more secure systems – where GotoAssist is not able to complete a connection.

I believe this may be due to them being required to update a Java component or manually uninstall and reinstall the GotoAssist client — however since I am not in charge of managing their IT it becomes a hard stop.. very very serious issue at this point because now you add an hour to your support session playing GotoAssist support rep…….

GotoAssist also has fallen into a very dangerous trend of pushing out updates so frequently that many times your remote session has to wait to download a fat update that can take 3 or 4 minutes. Then the customer is sometimes required to download an update.

And I do NOT think any one publisher is alone in how they manipulate their commission based on how much activity a partner generates (a number they control and can make increasingly difficult for the majority of partners to achieve).

Nobody is Paying You A Lifelong Commission

I’ve been very vocal with SaaS providers who claim that they’re going to pay anyone a margin on renewals that goes on forever (In my opinion they probably will keep paying but you’ll see the tier qualifications push ever upward as profits are constrained and more $$ needs to go into the software publisher’s pockets).

The latest update from Sage (which is not really new but more a restatement of their prior policies toward paying margin on subscription plans and renewals):

1. If you don’t sell 2 deals or $25k – you lose margin on both past and present subscription deals. Let’s say for argument you built your practice up nicely and have 100 customers on subscription but for some reason you stop selling.

Maybe that reason is retirement or perhaps you decide to diversify and take on another product.

Holy lock in Batman – you’re stuck

Note: I realize there is sometimes a “cure” period where you can try to catch up with sales volume before finally losing all margin. For the sake of argument lets assume you’re unable to “cure” what the publisher deems an unacceptable level of sales.

Kiss your entire margin bye-bye (whether a software publisher allows transfer of your book of business to another partner is anyone’s guess — but I guess no).

2. These metrics are subject to change at any time. Publisher needs the ability to increase revenues? Just bump the qualifications to 3, 4 or maybe 10 deals per semester. Don’t think there’s not a spreadsheet somewhere setup for “if then” analysis which predicts how many partners would stop losing margin if the rules were tweaked to require an extra deal (or two) per measurement period.

Re-selling subscriptions does not build a recurring commission revenue stream that you will likely be able to cash out at some any point in the future.

So what you’re left with is laser focussing on your own revenue stream.

Access agreement

Consulting

Business process improvement

Enhancements

These services are things that any software publisher will have a tougher time (not impossible – just tougher) taking away from you.

The moral of this long tirade — control your own recurring revenue. Do not rely in the whim of anyone to pay you an ongoing commission.

Another day – another somewhat crazy email from a software publisher promising implying high commissions to Sage partners who looking for the golden ticket that returns them to the 1980s glory days of 50% or higher margins.

The new lead reality is that customers don’t know what they want except they would like …

A free assessment

Free consulting to help figure out what they want

Free consulting to test the solution being considered

Free workflow or business process planning or suggestions

Free recommendations about alternative options

Free demo

Absolutely no obligation to purchase or to communicate ever again with the consultant once a free proposal has been delivered

My observation is that virtually all new ERP leads are in verticals where there is a highly specialized unique need – often unmatched by any type of realistic budget or any true understanding of the complexity of the ERP required to solve the business problem(s).

And like lemings off a cliff there’s a material number of partners who chase these leads – right off the cliff.